Fewer Auto Loan Losses

 

According to the Fitch Ratings, the number of delinquencies and losses on auto loans in the United States have dropped 30% for the month of April. They said that a lot of this has to do with the fact that many people have gotten their tax refunds in and have been able to make payments on their auto loans. They said that there is the added benefit if better recovery rates on repossessed vehicles. They said that they are finding that the economy is doing better than what it was, and although they are not really near where they need to be, any recovery for the economy is a recovery for every industry.
 
They said that compared with last year, the status of auto loan delinquencies is much better. They said that the number of people that are 60 days or more delinquent had dropped 20% during April, and the annual net loss for auto loans had dropped 15%. They said that their numbers were the lowest they have seen since June of 2007. Further, they said that the economy was at its weakest in 2007 and 2008, and as the economy improves, they are going to see even better numbers in the auto loan industry.
 
They said that there is the added effect of higher used car prices and better rates on used auto loans. These will both help with their bottom lines. However, they did caution that although these rates are better than they were, if the number of delinquencies do not increase dramatically that they will continue to be a concern for asset backed securities.



 

Back to May 2010 Archives